FIXED ANSWERS

1. 200/-
2. Falling off horse
3. Prof. Hubener
4. Air
5. Lloyds
6. Bribe
7. Consideration = Premium
8. Subsidy
9. Intangible = Insurance

KEY NOTES

1. IRDA – Insurance Regulatory and Development Authority of India

2. Premium – Fixed amount, Depends on age, Related to mortality, Cannot be changed
3. Sum Assured – Given back to customer @ Death or @Maturity
4. Insurable Interest – Financial Relationship between Policyholder & Life Insured
 Self –Unlimited
 Parents- Children
 Spouse
 Employer – Employee Insurable Interest Exist
 Business Partners
 Creditor – Debitors
 Brothers – Sisters
 Friends Insurable Interest Not exist

5. IGMS – Integrated Grievances Management System – (Call centre of IRDA)

6. Ombudsman - Need to approach within 1yr & 12 offices in India
 Claim amount up to 20L
 Recommendation- 1month (if agreed by customer, next 15days will be settled)
 Award Passing - 3month(if agreed by customer, next 15days will be settled)
 Jurisdiction limit - Territory
7. Consumer Forum - Need to approach within 2yrs.
a. District - Upto 20L
b. State – 20L – 100L
c. National – Above100L
8. Agent/ Advisor – 18yrs completed, Sound minded, No criminal cases
 Rural- 10th, Urban – 12th
 25hrs training to be completed and pass III exam; Exam Fees – 250/-
 Should not do Churning(Surrendering existing & take new policy)
 Composite Agent – Both Life & General  50hrs of Training
9. Indian Contract Act 1872 – Contract Exist between Policyholder & Insurer(Insurance company)
Elements of Contract
 Offer & Accept – Accepting Each other unconditionally
 Consideration – Premium
 Consensus Ad-idem – Understanding between the parties
 Capacity – 18yrs completed, Sound minded, No criminal cases
 Legality – Object of taking contract( Timing of death uncertain)
 Free consent – 1. Coercion; 2. Undue influence; 3. Misrepresent

10. Legal Principles – Utmost in good faith/ Uberima Fides

a. Disclose all material Facts related to risk
b. Applicable to both Insured &Insurer
c. Considered at commencement of policy&also at revival of policy
11. HLV – Human life Value – Insurance requirement of an Individual; Designed by Prof.Hubener
a. Generally 10 – 15 times of Annual Income
Annual Income – Self expenses
HLV= ------------------------------------------------ x 100
Bank Rate

12. MWPA – Sec 6 of Married Women Property Act, 1874

 Life Insured – Married Man,
 Beneficiaries- Trustee( Wife & Children can act as trustee)

13. Keyman Insurance – SA based on business profitability

Employer taking insurance on Key employee
14. MRI – Mortgage Redemption Insurance (only for Loans)
Decreasing term Plan ( SA - Decrease & Premium – Same)
15. Products – Tangible(visible)& Intangible( invisible)Insurance is example for intangible product
16. Prospectus - About Insurance products
17. Proposal form – Insurance Application form to collect all information about customer
 Filled by Proposer( If he illiterate – 3rd party can do but advisor don’t fill)
 Should follow Uberimma fides
18. KYC documents- Recent photo Standard Age proof ( DD/MM/YYYY)
Address proof School certificate/Mark sheet/TC
ID proof Pass port & Driving License
Age proof PAN card
Income proof Baptism certificate
Married certificate
Non Standard (accepted with extra )
Ration card, Panchayat certificate
Horoscope , Voters ID
 19. AML – Anti Money Laundering act 2005( Cash limit- 50000/- without PAN card)
20. ACR – Agent Confidential Report ( Give truthful information about customer)

Accept/Reject Policy Document Free look period

| | | |
15 days 15 days 15 days

If Accepts Contract
Will start
FPR (First Premium receipt)
Policy document

Policy Schedule Standard Provisions Specific Policy Provisions

 Details of the Policyholder – Name , Address, DOB

 Details of the Life Assured – Name , Address, DOB, Relationship Policyholder
 Details of the Nominee- Name, Address, DOB, Relationship with with Life Insured
 Details of the Policy – Premium, SA, Date of Risk commencement, Date of Maturity, Policy term,
Premium Paying Term, Rider Details
 Insurer’s Seal with signature of the authorized person and stamp fees.
 Address of the local ombudsman
Standard Provisions- General Terms and conditions of the Policy.
 Grace period – Additional time given by Insurer to pay premium without interest.
Monthly - 15days; Quarterly/Half-Yearly/Yearly – 1month/ 31days
If death happened during Grace period, Claim will be settled after deducting the
unpaid premium.
 Lapsed – If premium remains unpaid then policy said to be lapsed & Claim will be rejected.
 Revival/Reinstatement – Continuation of Lased policy ; Unpaid premium + Interest + DGH
 Suicide Exclusion Clause –Suicide death will be covered after 1yr of Commencement/Revival
 Surrender – 3yrs paid and completed policy can be surrendered; Based of paidup value.
 Paidup – 3yrs paid and completed;
No of years Paid
Paidup = --------------------------------- x SA
No of Years Payable

 Loan – 80 to 90 % of surrender value

 Endorsement = Changes in the policy document.
 Nomination – Sec39
If Nominee is minor – Appointee Required
 Assignment – Sec 38
Nomination does not change the rights but assignment does it.
Types – 1. Conditional Assignment 2. Absolute Assignment. ( No reassignment)
 Assignor Assignment
Assignee
Reassigment

21. Underwriting (UW ) – Deciding Whether to Accept/ Reject the proposal.

 Decision – Accept
Accept with extra premium
Accept with extra condition

 Classification of Lives – Preferred Lives – very Low risk

 Standard Lives - Low risk
 Sub Standard Lives – Moderate risk
 Declined lives – High Risk

Methods – Numerical – >Rating method

Judgement - >Assumption method

Types of UW -- > Medical – Medical test needed

Non Medical – No medical test
Financial – Income proof
Primary Underwriter/ field level underwriter – Agent / Advisor

Early Death claim – Within 3yrs

Death Claim
Non Early death – After 3yrs
( Will go to Nominee)
22. Claims

Maturity Claim -> Will go to Policyholder

Presumption of death – 7 Years

23. Products

Traditional Non Traditional

Protection Savings Protection & Savings Protection and Investment

Pure Term Pure Endowment Anticipated Endowment Unit Linked Insurance Plan
 Pure Term – Death Benefit Only ; No maturity, Low premium with High HLV
Options – Increasing Term
o SA- Increase by every year
o Premium – Same
Decreasing term
 SA- Decrease by every year
 Premium – Same
TROP – Term with Return of Premium
Death Benefit – SA
Maturity benefit – Premiums paid
Whole life Insurance – Life cover till Life end( May be up to 99yr)

Pure Endowment – No Death Benefit ; Only Maturity

Anticipated Endowment – Death & Maturity

Money Back Plan
One type of Endowment
Periodical Returns ( Ex - Every 5 years)
Death benefit, Maturity Benefit, Money bank survival benefit
ULIP – Unit Linked Insurance Plan
o Based on shares; Investment risk is to insured ;
o Non Guaranteed returns
o Death Benefit = Higher of SA or Fund value
o Maturity Benefit = Fund value
o Fund Value = No.of Units accumulated x NAV(Net Asset Value)
o Lock in periods = 5yrs
o Partial withdraw allowed

Riders – Additional benefit with additional premium

Exam Instructions
 Reach Exam center before half an hour
 Bring your hall ticket, ID proof, and Pen for writing purpose
 Exam Duration – 1hour
 Required Pass mark – 17 out of 50 ( 35%)

Exam Tips
 Select ‘ C’ for all questions without reading questions in 10 mins
 Change to correct answer
 Select “ Word Matching”
 Select “ Meaning Matching”
 Select “ Lengthy Statements”
 Select” All the above”
 Don’t select “ None of the above”